The Boom in Copyright Sales in Pop Music 2021
Several stars, including Bob Dylan and Shakira, recently sold their rights. A novice investment fund stands out in the competition to the giants Universal, Warner and Sony for the megacontracts.
After decades of managing his own artistic heritage, Bob Dylan sold his rights for an estimated $ 300 million.
Copyright is a lucrative business in pop music. Michael Jackson already knew this when, in 1985, he bought 251 Beatles songs for 47 million dollars. A trifle, compared to the $ 300 million for which Bob Dylan is estimated to have sold his rights to the Universal Music label. Until now he was one of the few artists who manage the archive itself, a task now taken on by the largest musical conglomerate in the world.
Neil Young also transferred in 2021 the rights to some of his songs, including classics like Heart of gold, and to none other than the investment fund Hipgnosis. Also recently, Shakira and Stevie Nicks, from the band Fleetwood Mac, closed similar mega contracts. Mere coincidence? Or another effect of the pandemic?
Music economist Peter Tschmuck of the University of Music and Performing Arts in Vienna believes that the motivations are diverse. “For Bob Dylan, it may have been a kind of pension for the next generation, but among the younger generation it may be an extra source of income, since many possibilities for presentation have been canceled.”
Profit for Others
Musical rights are a real treasure: those who own them pocket every time a song is used, up to 70 years after the death of the composer, whether in films, advertising, cover version, in live shows or on streaming platforms, such as Spotify and Amazon. An example: the aforementioned investment fund Hipgnosis owns the rights to four songs heard in the fourth season of The Crown series. That is, with every Netflix marathon, the cash register sounds.
So far, however, it is rarely that of the musicians themselves that sounds. “There are still a lot of old contracts, in which music streaming artists are treated like selling records,” comments Tschmuck. “There were clauses that provided, for example, a participation in the sales of 10% to 12%.”
In the sale of CDs or LPs, this was not a bad deal, but applied to the reasonable subscription prices of streaming services, it is not possible for any artist to support himself more. In the past there have been massive protests and criticisms in the music scene. Thom Yorke, from Radiohead, for example, still refuses to put his music on Spotify.
Competition to Copyright Giants
Since 2015, even the European Commission has been dealing with copyright in the digital market. At the time, 1,110 European artists appealed to the institution, mainly criticizing YouTube. Until then, the platform was exempt from the licensing obligation, reserving a very unfair commercial advantage within the sector.
Thus, in 2019, the Commission issued the directive on “Copyright in the digital domestic market”, which in turn led to mass protests by youtubers and other influencers. And much remains to be discussed.
It is certain that the concerts continue to be the most profitable source of income for the artists, and not the sale of records or the profits with streaming. For this reason, many younger musicians prefer to earn a large sum at once in place of numerous mini-amounts, which for some are barely enough to support themselves.
For famous musicians, sometimes the sale of a single song is enough. This is the case of Sexyback, by Justin Timberlake, or Set fire to the rain, by Adele. The rights to both hits are now with the investment fund Hipgnosis. Founded in 2018, it is in serious competition with the three industry giants, Universal Music, Warner and Sony Music.
The name is a tribute to the British design studio responsible for Pink Floyd album covers, among others. Behind them are two veterans of the music industry: Nile Rodgers and Merck Mercuriadis. He was the manager not only of Elton John, Iron Maiden, Guns n ‘Roses and Beyoncé, but of his companion Rodgers, member of the band Chic and producer of David Bowie and Madonna, among others.